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Morning Coffee: The 150 Citi MDs hurrying to cut thousands of jobs. Ex-Credit Suisse trader AWOL after magic mushroom holiday

No one knows yet how many jobs will but cut in Jane Fraser's reorg of Citi, but given that it's being posited as the biggest restructuring at the bank this century and that if Citi's compensation ratio were to equal JPMorgan's compensation ratio then Citi's compensation would need to be reduced by 20% - implying a 48,000 person reduction in headcount, things could get harsh. 

The actual number of jobs to be cut will be divulged when Citi announces Q4 earnings on January 12, 2024. By that time, however, the cuts will be well underway. Bloomberg reports that Citi's 150 top managing directors have been given until November to draw up org charts determining who does what and who is not required. Citi's MDs are being assisted in this by Boston Consulting, which seems unusual as Fraser spent 10 years at McKinsey & Co. Boston Consulting is also busy cutting staff at the ECB, where people are already complaining about the use of buzzwords and junior consultants' ineptitude.

When the cuts commence, the Citi people most at risk will reportedly be those in executive roles to three levels below the CEO in the big divisions Fraser has done away with (consumer and the institutional clients group/investment bank), and in the geographies she no longer recognizes. Senior and expensive people will be most affected, which will reduce the number of cuts needed of overall. It explains why, in an organization of 240,000 people, only 150 MDs have been tasked with plotting where the ax will fall. - Citi's remaining MDs are at risk of being chopped themselves.

Separately, the last time we wrote about Kyle Davies, the ex-Credit Suisse Singapore trader and founder of failed crypto hedge fund Three Arrows, Kyle had been having a fine time in Bali eating pork, painting, ingesting magic mushrooms, meditating and drinking a lot of alcohol. It was a "magical" experience. 

The shimmer may now be wearing thin. On Friday, Su Zhu, Davies' co-founder at Three Arrows was arrested at Singapore's Changi airport and imprisoned for four months for failing to cooperate with an investigation into the fund's failure. Davies would be arrested too, but for the fact that no one knows where he is right now. He may be on the astral plane, although taking mushrooms while being pursued by the police seems like a recipe for indigestion and paranoia. 

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Meanwhile...

Jane Fraser has a sense of humor and likes to hide colleagues' cowboy boots during meetings. (Financial Times)  

Jane Fraser adapts her outfits for the role. When she moved to Missouri to fix its mortgage business, she swapped the Chanel suits she wore at the private bank for jeans and baseball tops. To fit in down in Mexico, where she was the first foreigner and first woman to run the local bank, she opted for red dresses, higher heels and a new hairstyle. (The Times)

Citi is already cutting 35 jobs at its London investment bank this week. The cuts will include three managing directors and nine directors. (Financial News) 

Credit Suisse paid out 200m Swiss francs ($220m) in compensation to retain staff while it was being acquired by UBS. (Financial News) 

Credit Suisse expects to make at least $2.2bn of losses in the third quarter as UBS integrates the business it rescued six months ago. It will report a $600m loss related to Apollo's acquisition of its securitisation unit. (Financial Times) 

Schonfeld strategic advisors is looking for an APAC head and three more APAC portfolio managers by 2024. (Bloomberg) 

Deloitte is paying partners £1m each but says conditions are challenging. (Financial Times) 

A Deloitte employee who spent 16 hours a day at work and had no time to buy food says he became increasingly bitter. (Euronews) 

Why did Greg Beckett, who worked on internal controls in the Delaware office, kill himself at work in January? A colleague said Beckett, “had been working on a number of high importance, high stress projects at work for an extended period of time." (WSJ) 

HSBC's head of public affairs is stepping down after declaring that the British government had been “weak” by curtailing its dealings with China because of pressure from the US. (Financial Times) 

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AUTHORSarah Butcher Global Editor

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